Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, No. 37-2009-00094779- CU-OR-CTL Richard E. L. Strauss, Judge.
McCONNELL, P. J.
In this declaratory relief action, Beth A. Riley appeals a judgment of dismissal entered after the trial court sustained without leave to amend the demurrer of America's Wholesale Lender (AWL), Countrywide Home Loans, Inc. (Countrywide) and Bank of America Corporation (Bank of America). Riley contends the court erred by finding her first amended complaint (FAC) alleges no actual controversy. We affirm the judgment.
We sometimes refer to defendants collectively as the Lenders.
BACKGROUND
Because we are reviewing a ruling after demurrer, most facts come from the FAC.
In December 2005 Riley purchased a home in Lakeside, California. The lender was AWL, and she signed a promissory note in its favor for $476,000. The note was secured by a deed of trust. Riley made monthly payments on the note to AWL.
AWL sold the note in the secondary mortgage market. In February 2008 Riley received a mortgage statement from Countrywide. In May and June 2009 she received mortgage statements from Bank of America, which had purchased Countrywide.
On June 1, 2009, Riley's attorney wrote to Bank of America and requested information concerning the loan, including a copy of the note; documents evidencing any sale, transfer, or assignment of the note; and a beneficiary statement and payoff demand statement, as authorized by Civil Code section 2943. Bank of America did not respond. On June 25, Riley's attorney sent a second request for information on the loan. Bank of America responded that it was reviewing the request and would "respond within due time."
Bank of America did not provide the information, and on July 27, 2009, Riley filed a declaratory relief action against it, AWL and Countrywide. The lenders successfully demurred, and in June 2010 Riley filed the FAC. The FAC alleged Bank of America still had not provided Riley with the requested information, and thus Riley "does not know whether any legal assignment of her Note has occurred. Plaintiff acknowledges a contractual obligation to make ongoing mortgage payments on the Loan but seeks to identify the party to whom her contractual obligation is owed." (Italics added.) The complaint alleged that a controversy existed between Riley and the lenders "in that defendants claim to be or to represent the current Note's beneficial owner, and plaintiff denies that claim." The complaint sought "a declaration identifying the current Beneficiary under the Note and the Deed of Trust and the current Trustee under the Deed of Trust."
The Lenders demurred, arguing there was no justiciable controversy, and the FAC "is still entirely devoid of any ultimate facts demonstrating either cognizable legal harm to Plaintiff or the specter of such harm to justify the special remedy of declaratory relief." The Lenders pointed out that the FAC did not allege Riley's "mortgage payments are being rejected because they have not been made payable to the proper recipient. Nor has she averred that she has received some kind of conflicting information about to whom or where she should direct those payments."
In a tentative ruling, the court sustained the demurrer without leave to amend for lack of a justiciable controversy, as the FAC did not "allege any facts that [Riley] is the rightful beneficiary under the Note, that another entity is the rightful beneficiary, or that she has no obligation to make payments to Defendants since they are not the rightful beneficiaries." At the hearing, the court asked Riley's attorney if there was a statute that required Bank of America to provide her with the requested information, and he responded, "There are two." The court asked the attorney whether she was suing for a statutory violation, and he stated, "She doesn't need to.... She is suing under declaratory relief." The court offered to give Riley leave to amend to allege a statutory violation, but she refused the offer and requested the immediate entry of a judgment of dismissal with prejudice to facilitate an appeal. The court complied with her request.
Civil Code section 2943 provides that a beneficiary of a mortgage or deed of trust "shall, within 21 days of the receipt of a written demand by an entitled person [mortgagor or trustor] or his or her authorized agent, prepare and deliver to the person demanding it a true, correct, and complete copy of the note or other evidence of indebtedness with any modification thereto, and a beneficiary statement." (Civ. Code, § 2943, subd. (b)(1).) If a beneficiary willfully fails to comply, "he or she is liable to the entitled person for all damages which he or she may sustain by reason of the refusal and, whether or not actual damages are sustained, he or she shall forfeit to the entitled person the sum of three hundred dollars." (Civ. Code, § 2943, subd. (e)(4).)
At the hearing, the Lenders advised the court that Riley "is not making any payments anyhow, because she got this whole thing discharged in bankruptcy as far as her liability is concerned. That is why it's a completely contrived controversy." Riley did not respond to the comment, but it was not relevant to the court's ruling on the demurrer.
DISCUSSION
A demurrer "tests the legal sufficiency of the factual allegations in a complaint." (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 42.) "[I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory." (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) In reviewing a demurrer, this court exercises independent judgment in determining whether the complaint's factual allegations state a cause of action. (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.) We treat the demurrer " 'as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.' " (Blank v. Kerwin (1985) 39 Cal.3d 311, 318.)
Code of Civil Procedure section 1060 provides that "[a]ny person... who desires a declaration of his or her rights or duties with respect to another, or in respect to... property... may, in cases of actual controversy... bring an original action... in the superior court for a declaration of his or her rights and duties in the premises." " '[D]eclaratory relief operates prospectively to declare future rights, rather than to redress past wrongs. [Citation.]' [Citations.] A declaratory judgment ' "serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them." ' " (County of San Diego v. State of California, supra, 164 Cal.App.4th at pp. 607-608.) " 'The plaintiff must establish facts which give rise as a matter of law to an existing or imminent invasion or his [or her] rights by the defendant which would result in injury to him [or her].' " (Zetterberg v. State Dept. of Public Health (1974) 43 Cal.App.3d 657, 663.)
The issue of whether there is an "actual controversy" within the meaning of Code of Civil Procedure section 1060 is also subject to de novo review. (County of San Diego v. State of California (2008) 164 Cal.App.4th 580, 606.)
Riley contends the FAC raises a justiciable controversy because "no foreclosure has been initiated here, " but "without a declaration of rights, defendants will continue to assert an ownership interest in the Note and Deed of Trust, and may seek to foreclose on it, with no proof that they have the right to do so." The FAC, however, does not include any allegation pertaining to foreclosure. Moreover, the FAC does not dispute that Riley had an obligation to continue making mortgage payments to Bank of America, or allege that Bank of America had rejected any payment because it does not own the note, that Bank of America had not properly credited her with payments, that there was any other lender claiming to be the owner of the note and demanding payments from her, or that she was in danger of suffering any injury. We agree with the court that there is no actual controversy within the meaning of Code of Civil Procedure section 1060. It appears that Riley was statutorily entitled to the information she requested, and she should have accepted the court's offer to grant her leave to amend to allege a statutory violation.
The Lenders argued to the trial court that the "time has now unquestionably arrived to terminate this fatuous abuse of the litigation process." They complained that Riley forced them to engage in lengthy litigation and "use a Howitzer to address what should have been a gnat." While Riley's declaratory relief claim was unsound, we wonder why Bank of America did not curtail the litigation by simply providing Riley with the basic information she requested.
DISPOSITION
The judgment is affirmed. The Lenders are entitled to costs on appeal.
WE CONCUR: O'ROURKE, J., IRION, J.